Finance Policy/Proposed revision

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This policy was approved by the Board on 29 April 2013. (approved revision, subsequent changes)
Changes to this policy are subject to board approval, and should be proposed either on the talk page or the Engine room

Approval history:

29 April 2013 - Revision as per adoption of the Scheme of Delegation (approved revision)

26 March 2013 - Revision of car mileage rates (approved revision, changes)

1. Introduction

As a registered Charity, and a very public one at that, it is imperative that we institute financial controls that satisfy the expectations of the Charity Commission, the Wikimedia community and the Wikimedia Foundation. This is also a vital part of attainment of our PQASSO accreditation.

This policy reflects two major developments in the chapter's organisational structure, namely the appointment of our first permanent staff on 1 October 2011 followed by the approval of our charity status by the Charity Commission on 5 November 2011 with its duties and responsibility.

As part of this policy, the system is set out where the Board of Trustees agrees the annual plan with financial allocations for different activity areas, projects and grants. The staff then administer the spending and the reporting against budgets, with the Treasurer having responsibility for ensuring appropriate expenditure, reporting and auditing. Volunteers receive support through the expeditious payment of expenses against activity budgets, and grants as agreed by the board.

The policy has been developed by bringing together best practice in the UK Charity Sector with what already exists within Wikimedia UK to create a robust framework that will be practical, proportional and secure. Charity commission guidance has been applied where appropriate and discussions have been had with Jon Worsop at UHY Nottingham, our accountants, and a meeting with UHY London.

This policy is intended to be flexible enough to allow for the expected growth of the chapter over the next few years. It is effective from 1 February 2012. In some areas there will be a period of transition where this policy is not fully implemented at first. These areas, along with any other exceptions, will be included in the Chief Executive's report to each Board meeting following the effective date. The policy was reviewed for operational effectiveness in October 2012, and will be reviewed annually thereafter.

The policy may, in exceptional circumstances, be overridden with the approval of the Chief Executive. Any such override will be immediately reported by the Chief Executive to the Board. A board decision may also override the policy in exceptional circumstances.

The points of each policy area are given below, with the responsible role for ensuring that the policy is adhered to given in brackets.

2. Key Principles

The key principles underlying this policy are:

  1. That our assets are safeguarded from loss, damage or fraud
  2. That our assets are applied to our objects in the most effective and efficient way
  3. That volunteers are facilitated to help deliver the Wikimedia UK mission.
  4. That our finances and assets are administered in a way that identifies and manages risk
  5. That the controls in place are proportionate to the risks
  6. That the highest standard of record keeping and financial reporting is maintained
  7. That financial reporting is clearly expressed and highly transparent
  8. That duties are sufficiently segregated in order not to overburden any individual or allow an excessive concentration of authority

3. Personal integrity

Effective financial controls rely on the personal integrity of all the people involved - including those making payments, claiming for reimbursement, authorising, monitoring or controlling budgets.

  1. We will follow Charity Commission guidance regarding checks on trustees prior to appointment. (Administrator)
  2. Where issues are revealed or disclosed, these will be treated sensitively and discretely, having due regard for the privacy of the individual but ensuring that chapters' assets are not put at risk (CE)
  3. Compliance with the Conflict of Interest policy will be monitored at least annually (Chair/Secretary/CE)

4. Income

  1. Post is held securely before collection (CE)
  2. Post is opened in the presence of two 'unrelated individuals' (i.e. people that are not close relatives by blood or marriage and are not living as part of the same household) with rotating staff where practical. (CE)
  3. All cheques and cash received held in a secure, locked place prior to banking (Administrator)
  4. All cheques and cash received recorded in a register (Administrator/Fundraiser)
  5. Cash received as recorded in the register is reconciled against paying in slips and bank statements at least monthly (Administrator with CE or Treasurer).
  6. Accurate Gift Aid records are kept and timely returns made. (Fundraiser)
  7. Regular spot checks are to be undertaken to ensure that Gift Aid declarations and claims are accurate. (Fundraiser with CE or Treasurer)
  8. Spot checks are to be undertaken to ensure that the funds from any Gift Aid claims are received and reconciled. (Fundraiser with CE or Treasurer)
  9. Appropriate controls are put in place for any Trading Income (CE)
  10. All donations in kind that are greater in value than £1,000 are duly recorded, but not monetized in the accounting records. (Administrator)
  11. All donations received in cash, cheque, bank transfer, Paypal, text, direct debit or other fundraising mechanism are to be promptly thanked and recorded (Fundraiser)
  12. All donor communication received by the chapter is responded to at least as quickly enough to comply with the Fundraising Agreement (Fundraiser)
  13. All direct debit instructions are processed in compliance with the Direct Debit regulations (Administrator/Fundraiser)
  14. Where restricted donations are received, records are kept of the restriction and their own budget lines will be maintained within the accounting records. (Administrator)
  15. Adequate monitoring is undertaken to ensure there is no abuse of public collections or fundraising events (CE)
  16. All donor data is encrypted and password protected in accordance with the Charity's data protection policies (Fundraiser)

5. Banking

  1. All bank accounts will be held in the name of Wikimedia UK (Administrator)
  2. No account will be opened or closed without Board authorisation (Administrator)
  3. Bank payments (cheque or BACS) require at least two signatories, unless the amount is for less than £250, in which case one signatory is required (Administrator)
  4. Signatories on all bank accounts shall be decided by Board resolution (Administrator)
  5. Records of all signatories on all accounts are kept in a single document (Administrator)
  6. Signatories will be a combination of the CE and trustees (Administrator)
  7. The signatories to the current account are not also signatories to deposit accounts (Administrator)
  8. The CE will only be a signatory to current accounts, and will only be so in a dual signatory system (Administrator)
  9. No signatory can make payments to themselves
  10. No third party shall be allowed to open accounts in our name (CE)
  11. The credit rating, charges and interest of all banks used shall be reviewed at least annually. (Administrator and Treasurer reporting to the Board)
  12. Bank reconciliations are prepared monthly for all accounts. (Administrator reporting to Treasurer & CE)
  13. Accounting records clearly record all interest receipts (Administrator)
  14. A record is kept of all cheques written (Administrator & Signatories)
  15. After each electronic banking transaction a printout is taken showing details of that transaction and stored as part of the accounting records (Administrator)
  16. Paper copies of all bank statements are retained and published on the office wiki (Administrator)
  17. A reserve policy is reviewed each year as part of the annual budget and year end (Treasurer)
  18. The balance of the current account is kept to a minimum, having regard for forecast cashflow requirements. Surplus cash is invested in deposit accounts (Administrator)
  19. As a short-term measure in present conditions, money held with any single financial institution should be no more than £85,000 (the Government guarantee limit), unless specifically authorised (CE/Treasurer/Administrator)
  20. Choice of deposit accounts will take account of credit worthiness, qualification for the government guarantee scheme (ie UK banks only), deposit insurance and interest rate and will ensure that the failure of one investment or institution would not have a major impact on the chapter. (Administrator reporting through the Treasurer to the Board)
  21. Records of all deposits made are maintained with regular reports (Administrator)
  22. All PCs with banking access be password protected in accordance with Wikimedia UK's data protection policies (Administrator)
  23. All passwords are kept secret in accordance with Wikimedia UK's data protection policies (Administrator and all users)
  24. All passwords are changed regularly and always following changes in authorised staff and trustees, in accordance with Wikimedia UK's data protection policies (Administrator and all users)
  25. Adequate training is provided to all involved in on-line financial transactions. (CE)

6. Assets

  1. Any individual item valued at over £200 is recorded in the fixed asset register listing their purchase price, purchase date, description, any identifying marks and location. (Administrator)
  2. All assets are safeguarded from loss or damage (CE)
  3. Adequate insurance cover is maintained to protect against any substantial loss. (CE with Administrator)
  4. The value of any such asset will be depreciated on a three-year, straight line basis.

7. Wages and Salaries

  1. Full records of all payroll payments and deductions are maintained. (Our agency monitored by Administrator)
  2. Monthly payroll reports from bureau are reviewed by Chief Exectutive with administrator
  3. Paper payroll records are held separately from any paper Human Resources files (Administrator)
  4. Statutory deductions are paid to HMRC monthly (Our agency monitored by Administrator)
  5. Year end payroll declarations are completed (P35, P11D and P60s) (Our agency monitored by Administrator)
  6. Minimum wage legislation is adhered to. (Our agency monitored by Administrator. Trustees to oversee.)
  7. For staff based in London, the London Living Wage is adhered to as a minimum. (Administrator)
  8. No unauthorised deductions are taken from pay (Our agency monitored by Administrator)
  9. All employees have a proper contract of employment. (CE with board support)
  10. A stakeholder pension scheme is provided for staff to opt in to, the employer contribution to which will be 6 per cent of the employee's salary (CE)
  11. Procedures are in place to record starters, leavers, changes in salary, overtime, sickness, maternity etc. (Our agency monitored by Administrator)
  12. Annual appraisal and salary reviews are held based on RPI, performance and market forces (CE or, in the case of the CE, the Board)

8. Reporting

  1. It is a condition of receipt of expenses that all expenses are published on an appropriate wiki so that the highest standards of transparency are maintained
    1. Individual expense claims are normally published on the office wiki (Administrator) with a summary of the claims posted on the public wiki
    2. Office expenses and the Chief Executive's expenses are published on the public wiki in summary form (Administrator)
  2. Income and expenditure is regularly monitored against budget. (Administrator)
  3. Monitoring to include management accounts, a comparison of budget to actual figures, an explanation of variances and details of cash flow, card accounts and closing bank balances. (Administrator)
  4. Monthly financial reports to be published on the public wiki (Administrator)
  5. Budget holders notify responsible staff of detailed plans and budgets (Budget holders)
  6. Processing of budget line expenses is the responsibility of staff with regular reporting to the budget holder and the Board. (Staff)
  7. Accounting records in line with good Charity Commission practice and our accountant's advice are kept to show all transactions. (Staff)
  8. Annual accounts are prepared and audited in line with the SORP (Statement Of Recommended Practice) (Accountants & Administrator)
  9. Annual accounts are presented to the AGM for approval and published publicly (Administrator)
  10. Annual accounts are provided to the Charity Commission, Companies House and the Wikimedia Foundation as required. (Administrator)
  11. Funds are specifically delegated to the initiatives that are explicitly described in the respective activity plan. Should an initiative not be specifically included in the activity plan, then the Board needs to be notified about the change of purpose of the budget line should the amount affected be equal to or greater than £500.
  12. The Board must be informed of any expenditure that exceeds £1,000, and the Board must be given a 24 hour period in order to raise objections to this expenditure. Should any trustee object to the expenditure, then a formal decision must be made about said expenditure.
  13. The Board must formally approve of any expense that exceeds £5,000, excluding recurring expenses (such as salary, pensions and rent).

9. Grants

  1. Grants under the value of £250 that are outside of individual budget lines will be considered via the Microgrants process.
  2. Grants between the values of £250 and £2,000) may be submitted as a one page document for review by the WMUK board via the Macrogrants process. See Grants/proposal template for a checklist of topics to cover in that submission.
  3. Grants in excess of £2,000, or complex projects involving 4 or more people, should be submitted to the Board for review after a page on this wiki has been created to develop and discuss your proposal.
  4. Where grants also fall under the Wikimedia Foundation's grant processes, then those grants could first be submitted to Wikimedia UK, and where suitable they may subsequently referred to the WMF with WMUK's approval.
  5. Grants to the Wikimedia Foundation will be made in line with the advice of our lawyers, with individual transfers being made upon agreement from the Board on the advice of the Treasurer (Treasurer)

10. Payments

  1. Clear and public authority levels are agreed by the Board for purchases and payments (within budget lines) as follows: (CE)
    1. Chief Executive: £5,000
    2. Other staff: £250
  2. The Chief Executive will, in liaison with relevant budget holders in each case, to seek approval from the Audit & Risk Committee prior to the commitment of expenditure on any one item or set of items per supplier that is in excess of £5,000 and is within the approved budget plan for the year or that is unbudgeted but does not exceed a threshold of £2,000 (CE)
  3. The Chief Executive is required to seek approval from the Board via the Audit & Risk Committee prior to committing the charity to expenditure on any item or set of items per supplier above £2,000 which is not within the approved budget plan for the year. (CE)

11. Procurement

NB: See Procurement process for an explanation of how to follow this.
  1. All purchasing must be considered in terms of 'value for money' including:
    1. Whether the suppliers are reliable and reputable (Budget Holders)
    2. Whether the costs, measured against similar suppliers, are reasonable (Budget Holders)
  2. The purchase of any equipment or service over £1,000 must show evidence of comparative quotes having been sought. When the lowest quote is not chosen reasonable arguments must be put forward for this decision. (Budget Holders)
  3. All successful tenders for services over a threshold of £5,000 should have a mutually acceptable contract signed by both Wikimedia UK and the contractor
  4. Any records of communications with, or about, tenderers and contractors should be retained for at least three years following the termination of the contracts.
  5. We shall endeavour to choose suppliers and purchases that reflect the values of the chapter, in particular not-for-profit, open source and free information (Budget Holders)
  6. We shall endeavour to source local, environmentally friendly and sustainable suppliers where this is possible and does not conflict with another priority (Budget Holders)
  7. All procurement shall be subject to our Conflict of Interest policy (Budget Holders)
  8. We will take regular advice from accountants in order to avoid any unnecessary VAT obligations, where and if appropriate (CE)
  9. All invoices are checked against goods or services received. (Administrator)
  10. All invoices are to be paid within the agreed terms unless disputed (Administrator)

12. Cheque and online payments

Secure procedures will be instituted for any payment by cheque including:

  1. Cheques must only be written in presence of documentation supporting the request for the cheque (Signatories)
  2. No pre-signed cheques may be provided (Signatories)
  3. Chequebooks kept in secure locked place (Administrator)

Secure procedures will be instituted for payments made with online banking, working within the bank's system procedures to ensure separation of duties, and authorization at the appropriate levels.

13. Card payments

  1. Staff or trustees may be provided a credit or debit card if a clear need can be demonstrated, after approval by the board (Administrator)
  2. Provision of a card can be withdrawn by the Board or by the Chief Executive at any time (Card users, CE and Trustees)
  3. Individuals receiving a Wikimedia UK card shall agree to a deduction from their salary or other amounts owed to them in the event of improper use (Card users)
  4. If a card user ceases in their role with the chapter, their cards will be cancelled and destroyed (Administrator)
  5. All statements will be sent directly to the offices of Wikimedia UK (Administrator)
  6. All expenses incurred using a card must go through the usual authorization processes (Card users)
  7. There will be a six monthly review of card use to ensure proper practice. (Administrator and Treasurer)

14. Regular bank payments

  1. There will be a quarterly review to ensure no redundant regular payments (standing orders or direct debits) are being made. If any redundant payments have been made, then a refund will be requested from the payee. (Administrator)

15. Cash payments

  1. Cash payments should generally be kept to a minimum, balancing the risks to the chapter against the convenience for individuals. (Administrator)
  2. A petty cash system with a float of normally £250 will be maintained. (Administrator)
  3. Recipients sign for all payments received. (Administrator)
  4. The petty cash book recorded a running balance of Petty Cash (Administrator)
  5. Regular spot checks of Petty Cash are undertaken by a third party (CE)

16. Reimbursement of Expenses

For the record of expense claims by staff and trustees, see Trustee Expenses 2012-2013
For an expenses claim form, see File:Expenses Claim Form.pdf
  1. A common set of financial controls is applied to all expense payments, without exception, to all those involved with the chapter whether staff, trustees or other volunteers. (CE)
  2. We seek to involve people in our activities that reflects the diversity of Wikimedia project users and recognise that not all such people are able to pay for their own out of pocket expenses. We will therefore normally reimburse expenses that are properly incurred for the benefit of the chapter. Advance payment of expenses will be considered where cost may be an obstacle to any person carrying out their activities. (Administrator)
  3. We have tried to establish a policy that is as easy to use as possible, particularly for volunteers. (Administrator)
  4. The procedure and policy for expenses is included in all induction training (Administrator)
  5. Expenses will only be reimbursed if they are approved in principle prior to the expense, are reasonable, are correctly submitted and supported by receipts as appropriate and are properly authorised. (Payer)
  6. The policy sets out the requirement for the provision of properly identified claims and original receipts. If necessary credit card or bank statements may be acceptable (Payer)
  7. Claimants are expected to keep the expenses they incur to the lowest reasonable level. (Claimants)
  8. Authorisers must only authorise claims after they have been checked for accuracy and the correct associated paperwork. Authorisers may not process their own claims. (Authorisers)
  9. Expense claims must be accurate. Submitting or authorising a false or misleading claim, even if not paid, may damage public confidence in the chapter and will be considered a serious disciplinary matter. For staff members this may result in disciplinary action. In extreme cases, disciplinary actions may include removal of membership and hence, for board members, their directorship under Article 4. (Claimants/Authorisers)
  10. Expenses are expected to be submitted within three months, or, for expenses incurred up to two months prior to the accounting year end, by one month after the year end. If expenses are not submitted in time, the Charity may be unable to pay them. This rule ensures that the annual financial statements can be prepared promptly. (Administrator)
  11. All claims for reimbursement will be paid, unless disputed, by BACS or through petty cash within a week of approval. (Administrator)
  12. Unless we receive a dispensation, an annual P11d expenses form will be provided for any affected staff (Administrator & Agency)

More detailed areas of expense are detailed below:

17. Airfare

  1. Airfares are only repaid at economy class rates.
  2. Flights not using low cost carriers should be booked through the office with our in-house travel agent to obtain charity rates. (Administrator)
  3. When not booking through the office, budget airlines are preferred where available; otherwise the use of standard airlines is acceptable, particularly when flights are of long duration (i.e. over 4 hours), or the cost of a standard airline is comparable to a budget airline. (Administrator)
  4. Increased costs resulting from travelling at more convenient times are acceptable, providing that it does not significantly increase the cost. (Chief Exec)

18. Train

  1. Train fares are generally only repaid at standard rates. First class fares may be reimbursed where the cost is less than standard class plus the reasonable benefits of first class [e.g. internet access, and catering].
  2. Claimants should try to travel off-peak wherever possible.

19. Private vehicles

  1. Travel by private motor vehicle will be reimbursed at the HMRC mileage rates applying at the time. The additional amount per passenger per mile can be claimed when carrying passengers who are also on WMUK business. As mileage is more likely to be incurred for individual trips than in bulk throughout the year, the higher HMRC rate will be used for the first 150 miles of any round trip; thereafter the lower HMRC rate will be used for the remainder of the miles.
  2. Individuals are expected to travel by public transport, or private vehicle, wherever possible. Travel by taxi should be considered only if there is no other reasonable option.
  3. Claimants should ensure that their car insurance allows them to be compensated for travel. This may require them to include use for business purposes on the insurance for the vehicle. The cost of such coverage, or any other insurance coverage including breakdown cover, will not be covered by WMUK beyond the standard rates.
  4. Toll charges where unavoidable or incurred during peak times will be reimbursed.

20. Car rental

  1. Vehicle rental may be approved in advance where necessary on a case-by-case basis, but would not be reimbursed on a routine basis.
  2. For example when necessary to transport bulky items, or if the cost of renting and petrol is less than the cost of private motor vehicle mileage (as described above) or other reasonable transport alternatives.

21. Insurance

  1. WMUK Staff and trustees will be covered by the WMUK travel insurance policy when on WMUK business (Administrator)
  2. Pre-existing illnesses need to be reported to the insurance cover before travel (Staff and trustees)
  3. Otherwise WMUK expects, and encourages, all individuals traveling on WMUK business to have obtained the appropriate travel insurance, and will reimburse the cost of this insurance.
  4. WMUK will not normally reimburse expenses and liabilities incurred that would otherwise have been covered by such insurance.

22. Companions

Where expenses are being reimbursed for people under 18 years old, or for people who are disabled and require assistance, the corresponding travel for their guardian or companion may also be reimbursed, if approved in advance and in line with this policy. (Chief Exec)

23. Accommodation

  1. Reasonable costs of accommodation while on Wikimedia UK business will be reimbursed.
  2. We expect people to choose accommodation that represent reasonable value. As a guideline this would mean their own room with their own bathroom in a safe area within reasonable distance of the venue they are attending.
  3. We recognise that the price of accommodation varies geographically and by season.
  4. When standard accommodation is designated by a conference or workshop, we would normally expect people to stay at that hotel even if alternative, cheaper, options exist.

24. Incidental expenses - per diems

  1. When agreed with the Office Manager in advance, the option of "per diem" expenses allowance may be paid for those coordinating, facilitating or presenting at Wikimedia events or for those at other events and meetings when acting as the official representative of Wikimedia UK. The per diem rate is intended to cover:
    1. meals and refreshments, including breakfast, lunch and dinner for the full rate; or either lunch or dinner for the lower rate; in both cases including refreshment ##costs in between meals
    2. costs of phone calls
    3. Incidental transport costs (e.g. bus fares, car park charges, short taxi rides) too trivial to submit claims for
  2. These rates are designed to apply to stays of less than 7 days duration within the UK, the rest of the European Union, and the United States of America. Rates may be altered at the discretion of the Chief Executive and Treasurer for longer stays, other locations, or particular circumstances. Where these items are provided by Wikimedia UK or another party, reasonable deductions, at least equivalent to the benefit, will be deducted from the per diem rate. Should there be any doubt or disagreement, the default of requiring receipts for all expenses shall apply. If the per diem rates prove inadequate owing to high local costs then individual expenses can be submitted for assessment by the office whose decision will be final.
  3. Where any individual claims per diem expenses on a recurring basis, the Chief Executive will review the arrangement to ensure that the chapter is not breaking its obligations under minimum wage legislation.
  4. The normal rates for the per-diem, which may be varied for particular circumstances, are:
    1. Full day (> 7 hours of activity including travel to and from) with overnight stay : £30 per day
    2. Full day (> 7 hours of activity including travel to and from) without overnight stay : £20 per day
    3. Half day (4-7 hours of activity including travel to and from): £15 per day

25. Other expenses

WMUK may also reimburse, where incurred for the benefit of the chapter and approved by the relevant budget holder in advance:

  1. Registration costs for conferences
  2. Meeting rooms, catering and other corresponding costs for WMUK and WMUK-related events
  3. Long-duration car parking expenses where necessary
  4. Publicity material, such as badges, T-shirts and printed materials, and corresponding postage costs, where that material cannot be supplied by the WMUK office
  5. Phone calls to participate in meetings remotely - normally not needed, as WMUK have a freephone conference call service
  6. Costs of caring for dependants whilst on WMUK activity
  7. Entertainment costs for other parties
  8. Other reasonable expenses